There are two main credit reporting agencies in Ontario: Equifax and Trans Union. Information about your bankruptcy or consumer proposal is reported to these agencies by the Office of The Superintendent of Bankruptcy (OSB), not your trustee. The OSB will advise these agencies when you file a bankruptcy or proposal and when you receive your discharge.
If you file ANY of a bankruptcy, consumer proposal, debt management plan or do a debt settlement, a not will appear on your credit report that can negatively impact your credit. In general:
- a first bankruptcy will remain on your credit report for six years (Equiax) or seven years (TransUnion) after you are discharged;
- a consumer proposal (or debt management or debt settlement plan will remain on your credit report for three years after all of your payments are completed.
Bankruptcy does not mean you cannot borrow for six or seven years. This just means that the note will remain on your report, however there are many other factors that affect your ability to get credit.
If you have a job, and if you have a down payment or security deposit, it is possible to repair your credit sooner. Many people are able to buy a car or a house in less than seven years after their bankruptcy ends, if they are able to save money and begin repairing their credit. Here are some ways you can improve your credit after filing for bankruptcy:
- Pay you bills on time.
- Get a copy of your credit report, review it for errors and make sure your bankruptcy notice is removed when it should be.
- Start saving so you can have a larger down payment which will positively affect your ability to be approved for a new loan.
- Consider rebuilding your credit with the use of a secured credit card.
- Once you do receive credit, use it wisely. Show that you can make your payments on time and do not over-use credit again.
Saving money, paying your bills on time and re-applying for credit slowly can change how long bankruptcy affects your credit, and your ability to borrow in Ontario.